BDS4614, MANAGEMENT DECISION SCIENCE

Tutorial 4
Topic 7: Simulation

QUESTION 1
Tan’s Bakery sells several types of bread and cake. Its income mainly comes from its signature cake. The
daily demand of the signature cake is described by the following probability distribution:

Daily Demand (Slice) Probability

80 0.10
90 0.25
100 0.30
110 0.25
120 0.10

Each slice of signature cake cost RM3.50 to bake and sells for RM7. Any slice cakes that are not sold are
donated and do not produce any revenue. Simulate the sales of the signature cake for 10 days. If Tan’s
Bakery decided to bake 100 slices of signature cake each day, what would the average profit be for the 10
days simulated?

QUESTION 2
Chong is a PhD student at Multimedia University. He makes money by tutoring secondary school students
and his income varies depends on the number of students. His chances of various income levels are shown
as follows:
MONTHLY INCOME (RM) PROBABILITY
2500 0.10
3000 0.20
3500 0.45
4000 0.25
Assume that this income is received at the beginning of each month. Chong's expenditures also vary from
month to month, and he estimates that they will follow this distribution:
MONTHLY EXPENSES (RM) PROBABILITY
2300 0.05
2800 0.20
3300 0.60
3800 0.15
Simulate and comments on Chong’s monthly income and expenses for 12 months.

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BDS4614, MANAGEMENT DECISION SCIENCE

QUESTION 3
XYZ sales and service center schedules its appointments so that its clients do not have to wait beyond their
appointment time. Its 30th January schedule is as follows

Appointments time Expected time needed (minutes)

Ms Karen 9.00 am 45
Mr Abdullah 9.45 am 60
Kelvin 10.45 am 80
Mr Sailesh 12.05 pm 35
Mr Tan 12.40 pm 120
Ms Siti 2.40 pm 80
Mr Hassan 4.00 pm 30
Ms Eunice 4.30 pm 30

However, not all clients arrive exactly on schedule and the expected time is just that- expected. Some may
take longer than expected time and some take a shorter time. XYZ’s record indicates that
10% of the clients will be
Probability
Client will be 15 minutes early 0.10
Client will be 5 minutes early 0.20
Client will be on time 0.35
Client will be 5 minutes late 0.20
Client will be 15 minutes late 0.15
Probability
20% less than expected time 0.10
10% less than expected time 0.20
Exactly the expected time 0.55
10% more than expected time 0.10
20% more than expected time 0.05
XYZ’s daily operation hours is from 9 am – 5 pm. Assuming that the clients will be entertained in order of
their scheduled appointment, will XYZ able to get all the work done before 5 pm?

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BDS4614, MANAGEMENT DECISION SCIENCE

QUESTION 4
I-Home sells several types of furniture. Past sales for a particular dining table had been recorded in the
following table

Demand Per 0 1 2 3 4 5
Week
Number of Weeks 2 15 23 17 26 17

Based on historical data, the following probability distribution for lead time has been obtained.
Lead Time (Weeks) 1 2 3 4
Probability 0.2 0.3 0.35 0.15

The holding cost is RM5 per week for each dining table left in inventory at the end of the week. I-Home has
decided to order 10 dining tables each time an order is placed. Besides, I-Home has decided to place an
order whenever there are only 5 dining tables left at the end of the week. The stockout cost has been set at
RM50 per stockout. Simulate 20 weeks of operation for I-Home. Assuming there are currently 10 dining
tables in inventory. Determine the weekly stockout cost and weekly holding cost would be for the problem.

QUESTION 5
Xcomp sells and services several brands of computer. Based on the sales record of a particular brand of
computer the following probability distribution of demand is obtained

Demand per month Probability

0 0.1
1 0.15
2 0.25
3 0.2
4 0.1
5 0.2
Based on cost consideration, Xcomp decided to order 8 of these each time an order is placed. The holding
cost is RM5 per week for each that is left in inventory at the end of the week. The stockout cost has been set
as RM50 per stockout. Xcomp has decided to place an order whenever there are only two computers left in
inventory. The lead-time in weeks is described by the following distribution

Lead Time Probability

1 0.1
2 0.45
3 0.25
4 0.2

Currently, there are 3 computers in inventory. Simulate 10 weeks operation for Xcomp. Determine the
average inventory cost and average stockout cost.